Principles of Management: Business Process Reengineering

PRINCIPLES OF
MANAGEMENT
Module III - BUSINESS PROCESS REENGINEERING
03.10.18 1
SYLLABUS
 Need for BPR
 Various phases of BPR
 Production and Productivity in six sigma and TQM
 Factors Influencing Productivity

DAIRY MILK FANTASY
Do we need innovation in process?

What is a PROCESS?
A specific ordering of work activities across time and
space, with a beginning, an end, and clearly identified
inputs and outputs: a structure for action.
What is a BUSINESS PROCESS?
BP is a collection of activities that takes one or more kinds

of input and creates an output that is of value to customers.
Definition of Reengineering
The fundamental rethinking and radical redesign of core

business processes to achieve dramatic improvements in
critical performance measures such as quality, cost, and
cycle time.
KEY WORDS
 Fundamental
 Why do we do ?
 what we do?
 Ignore what is and concentrate on what should be.
 Radical
 Business reinvention vs. business improvement
 Dramatic
 Reengineering should be brought in “when a need exits for
heavy blasting.”
 Companies in deep trouble.
 Companies that see trouble coming.
 Companies that are in peak condition
COMPARISON OF RADICAL AND INCREMENTAL
What is BPR?
Business Process Re-engineering or BPR is
the analysis and redesign of

workflow and processes
within and between

Organizations
Spectrum of Change
REENGINEERING
AUTOMATION  refers to radical redesign of business
 refers to computerizing processes.
processes to speed up the  Aims at
existing tasks.  eliminating repetitive, paper-intensive,
 improves efficiency and bureaucratic tasks
 reducing costs significantly
effectiveness.
 improving product/service quality.
RATIONALIZATION
 refers to streamlining of PARADIGM SHIFT
standard operating  refers to a more radical form of
procedures, eliminating change where the nature of
obvious bottlenecks, so that business and the nature of the
automation makes operating
procedures more efficient.
organization is questioned.
 improves efficiency and  improves strategic standing of
effectiveness. the organization.
Why Reengineer?
 Customers
 Demanding
 Sophistication
 Changing Needs
 Competition
 Local
 Global
Reengineering & Continuous
Improvement--Similarities
Reengineering Continuous Improvement

Similarities
Basis of analysis Process Process
Performance measurement Rigorous Rigorous
Organizational change Significant Significant
Behavioral change Significant Significant
Time investment Substantial Substantial
16
Reengineering & Continuous
Improvement--Differences
Reengineering Continuous Improvement
Differences
Level of change Radical Incremental
Starting point Clean slate Existing process
Participation Top-down Bottom-up
Typical scope Broad, cross-functional Narrow, within functions
Risk High Moderate
Primary enabler Information technology Statistical control
Type of change Cultural and structural Cultural
17
What is the Need for BPR?
 The Problem is that
 we are governing in the 21st century
 with Processes and Organizations
 designed in the 19th Century
 to work well in the 20th Century!
We need entirely different

PROCESSES & ORGANIZATIONS
for Governance in the 21st Century
 Customers
(know what they want and are willing to pay for it)
 Competition
(Continuous increase will result in changes to price, quality, selective service, and
delivery)
 Change
(continues to occur in people&culture, organizational structures,
policies&procedures, and technology)
 Techniques lag behind technology
(Technologically capable, but not functionally operational)
 Problem of the stovepipe
(lack of communication between vertical functional areas)
 Fragmented piecemeal systems
(focus on vertical functions, with the existence of redundancies of effort and actions)
Effectiveness Vs Automation
 Automation : use technology to automate the “AS IS”

process to make it happen faster.
 Effectiveness: To improve service and satisfy customer

needs, while lowering costs.
Automation & BPR
 Automation is using technological tools to perform OLD

processes, in a NEW way.
 Like putting OLD Wine in a NEW bottle.
 BPR is about Innovation

 Making NEW Wine and putting it in a NEW bottle
BPR & Quality Initiatives
 Quality Initiatives attempt continuous improvement

 Six Sigma
 TQM (Total Quality Management)
 BPR attempts a radical redesign or transformation

 Big Bang approach
 Quantum Leap
3 Goals of BPR
1. Customer Friendliness
 Meeting customer requirements closely
 Providing convenience
2. Effectiveness
 Outcome-based approach
 Gaining loyalty of customers
 Image and branding
3. Efficiency
 Cost
 Time
 Effort
7 Basic Principles of BPR
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of
redesign urgency.
3. Integrate information processing work into the real work that produces the
information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their
results.
6. Put the decision point where the work is performed, and build control into
the process.
7. Capture information once and at the source.
BUSINESS PROCESS
CONCEPT OF BPR
VARIOUS PHASES OF BPR
1. Discover
2. Analyze and Document the redesigned Process(es)
3. Involve and rebuild
4. Reorganize and re-train
5. Establish the redesigned process(es) & redesign the
work teams.
6. Measure Performance
7. Continuous redesign and improvement
Measurement of BPR outcomes
 There are no consistent reliable measures available
 BPR could be measured during the evaluation stage in terms of:

 Process performance: cycle time, cost, customer satisfaction.
 IT performance: downtime, system use.
 Productivity indices: orders processed per hour.

Challenges associated with BPR
 Poor Leadership
 Poor or inconsistent communication
 Exclusion of current employees

Differences between traditional IT
implementations and BPR
Comparison between TQM & BPR
BPR is Not?
 Automation
 Downsizing
 Outsourcing
 Continuous improvement
Lecture Video Link:
https://classroom.google.com/w/OTY2MTg4NTI1NTRa/tc/MTE1OTU1NDMyMTcw
Demo Video Link:
https://classroom.google.com/w/OTY2MTg4NTI1NTRa/tc/MTE1OTU1NDMyMTcw
Quiz Link:
https://docs.google.com/forms/d/e/1FAIpQLSfL5cu_iStA8t4sLpHLcEUWmXjagGFEv5QFi1N8gTulNxz
dhw/closedform
Assignment Link:
https://classroom.google.com/c/OTY2MTg4NTI1NTRa/a/MTE1OTQ5NzM2MTgz/details

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PRINCIPLES OF

Module III - BUSINESS PROCESS REENGINEERING

 Need for BPR

 Various phases of BPR

 Production and Productivity in six sigma and TQM

 Factors Influencing Productivity

Do we need innovation in process?

What is a BUSINESS PROCESS?

BP is a collection of activities that takes one or more kinds

The fundamental rethinking and radical redesign of core

Business Process Re-engineering or BPR is

the analysis and redesign of

within and between

Reengineering Continuous Improvement

We need entirely different

 Automation : use technology to automate the “AS IS”

 Effectiveness: To improve service and satisfy customer

 Automation is using technological tools to perform OLD

 BPR is about Innovation

 Quality Initiatives attempt continuous improvement

 BPR attempts a radical redesign or transformation

 There are no consistent reliable measures available

 BPR could be measured during the evaluation stage in terms of:

 IT performance: downtime, system use.

 Productivity indices: orders processed per hour.

 Poor or inconsistent communication

 Exclusion of current employees

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